For a while, I’ve been arguing that SaaS is naturally a direct-sales business, even when sold to small organizations. If people are willing to have their business processes handled over a telecommunication network, they’re probably willing to buy services that way too. Indeed, the very first computer services firm ever was probably Automatic Data Processing. They sort of did SaaS, and they most definitely did direct sales.

What inspires me to bring this up now is the press around Microsoft Sharepoint. Apparently, there’s long been a SaaS version of Sharepoint for big firms, and now Microsoft is rolling it out for everybody. Now, I haven’t read the press releases, which weren’t sent to me by anybody at Waggener-Edstrom and are not easy to find on Microsoft’s web site. But the reporting doesn’t seem to mention partners, except in the negative. I.e., this seems like yet another significant direct-sales SaaS business.

If you follow this logic through, it suggests that a large part of the SaaS market will wind going to large companies with global reach — whether or not the rumors are true that Salesforce.com is currently being shopped around.

Google doesn’t just offer free email of the form address@gmail.com. You can also outsource your own domain to them (free if you accept incoming ads, $50/year/mailbox if you don’t). I’ve chosen to do this, because:

I need a mail host that can stand up under the kind of mailbomb/DDOS attacks that shut me down twice in the past year.

Similarly, I want to diversify my email addresses among two providers, rather than leaving them all with my general web hosting company.

David Ferris first wrote up Google Mail outsourcing, with a favorable view, last July. And some of his criticisms (e.g., lack of IMAP support) have already been rectified.

What’s more — as I remarked last night, David and his associate Richi Jennings have been voting with their feet, and moving their own email to Google. That’s an impressive endorsement. Ferris Research is a serious rival to Gartner as an analyst firm covering email, and Richi — who evidently LOVES Gmail — has also carved out a non-trivial identity as an expert in his own right.

By the way, I think the assumption SAP needs to sell ByDemand via indirect channels is an erroneous one. (Dennis Howlett seems to be at least partway to recognizing this. He also reports that SAP realizes that this is truly a sales issue.) Hence my stress on SAP’s internal sales management issues.

For 40+ years, application-oriented services have been sold in large part by direct sales forces. That goes back to the other payroll processors, and to time-sharing in general. Why would it change now?

SAP recently hired Dan Rosenberg away from Oracle to head its UI efforts, and Release 1 of a Dan Rosenberg user interface is likely to be very good. I know Dennis Howlett has a contrary view, and he’s actually seen the product. Even so, I’m optimistic about SAP’s claims to have designed the UI with an open mind, for maximum ease and simplicity, and validated by many rounds of testing.

Being an analyst has its perks, the main one being that you get to have some really interesting conversations. And so I recently had the chance to interview Mike O’Brien and Pat Wyatt, two of the founders and lead programmers for ArenaNet, makers of the Guild Wars MMORPG (Massively MultiPlayer Online Role-Playing Game).

If you play games of this sort, it’s surely obvious to you why you should care. But if you don’t, maybe you should be interested anyway. After all, Guild Wars is a graphics-intensive SaaS offering that easily supports 100,000 simultaneous users, while managing a gig or so of fat client even over dial-up speeds. Every user is a potential hacker, whether for fun or actual real-world cash profit, although we didn’t actually talk about security very much. And ArenaNet provides all this on a relatively shoestring budget; in particular, Guild Wars subscription fees are precisely $0.

I chatted with VMware today about virtualization, virtual appliances, and so on. But first we covered some basics:

VMware quotes a figure of 20,000 enterprise customers, if you count everybody who is at least testing the software and so on; i.e., it’s a somewhat inflated figure. Still, the “real” number is surely big.

They claim ¼ of those have a “VMware first” policy, to deploy new apps on a virtual rather than dedicated machine. That’s impressive until you realize enterprise try to roll their own apps as rarely as possible these days.

They suggest VMware is extremely helpful at times you’d like to have two copies of the same platform – e.g., for development, or when you have to take the system down for brief maintenance. It’s hard to argue with that claim.

Lance Cottrell of Anonymizer is one of those rare guys who make me believe he started a company in no small part to do good. And so his cloaking-technology company is providing free services to help Chinese citizens sneak through their national firewall, and is doing the same thing for Iran on a paid basis, under contract to the Voice of America. I think this is wonderful, and he reports that it’s working well now. Even so, I think there are scalability concerns. Right now only 10s of 1000s of users are covered. If there were a few more zeroes on that, standard spam-blocking techniques, currently ineffective, might work. What’s more, the Chinese bureaucracy, currently not highly motivated to shut the service down, might bestir itself to be much more effective.

I chatted today with Lance Cottrell, the founder and president of Anonymizer. They’re a little 30-40 person company, but even so they do three different interesting kinds of things. In increasing order of importance, these are: